HomeMy WebLinkAboutRES NO 12-94RESOLUT UN I 2 - 9 4
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF BAKERSFIELD PROVIDING FOR ISSUANCE
OF REFUNDING BONDS AND AWARDING SALE OF
REFUNDING BONDS IN CONNECTION WITH THE
CITY OF BAKERSFIELD ASSESSMENT DISTRICT NO. 86-2
(SERIES I -- TAX EXEMPT)
RESOLVED BY THE CITY COUNCIL (the "Council") OF THE CITY
OF BAKERSFIELD (the "City") as follows:
WHEREAS, on January 12, 1994, the Council adopted its
Resolution of Intention No. 1114 (the "Resolution of Intention") to
levy reassessments, and to issue refunding bonds upon the security
thereof, within an assessment district generally known as City of
Bakersfield Assessment District No. 86-2 (the "District"), under
and pursuant to the Refunding Act of 1984 for 1915 Act Improvement
Bonds (being Division 11.5, commencing with Section 9500, of the
California Streets and Highways Code) (the "1984 Refunding Act");
the Resolution of Intention is hereby referred to for further
particulars; and
WHEREAS, the refunding bonds are to be issued in two
separate series, one series to be tax-exempt and allocated to
refund tax-exempt prior bonds, and one series to be taxable and
allocated to refund taxable prior bonds; and
WHEREAS, as set forth in Resolution No. ]q-~q , adopted
by the Council on January 12, 1994, the Council has duly considered
the written report dated January 12, 1994, prepared in connection
with the proposed refunding and reassessment pursuant to Section
9523 of the 1984 Refunding Act (the "Reassessment Report"), has
made the findings required by Section 9525 of the 1984 Refunding
Act, and has approved, confirmed and adopted the Reassessment
Report and the reassessment and reassessment diagram(s) presented
therewith; and
WHEREAS, the reassessment diagram(s) and a notice of
reassessment have been duly recorded in the manner provided by law,
and the reassessments and interest thereon shall be collected on
the assessment roll for the City in the same manner and subject to
the same remedies on default and to the payment of interest and
penalties on the enforcement thereof as the original assessments of
the District; and
WHEREAS, the Council is now authorized under the 1984
Refunding Act to authorize, issue and sell the refunding bonds;
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ORtG~N~L
THEREFORE, THE COUNCIL FINDS, DETERMINES AND ORDERS AS
FOLLOWS:
SECTION 1. Definitions. Unless the context otherwise
requires, the terms set forth below shall, for all purposes of this
Resolution, have the meanings specified in this Section 1. These
definitions shall be equally applicable to both the singular and
plural forms of any of such terms.
"Aqent" means the transfer agent, registrar and paying
agent appointed pursuant to Section 28 of this Resolution.
"ArbitraGe Bonds" means each and all bonds in an issue
when any portion of the proceeds of the issue is reasonably
expected (at the time of issuance of the bond) to be used directly
or indirectly (i) to acquire Higher Yielding Investments, or (ii)
to replace funds which were used directly or indirectly to acquire
Higher Yielding Investments. A bond which was not an Arbitrage
Bond at the time it was issued can become an Arbitrage Bond if the
issuer or a person acting on behalf of the issuer deliberately and
intentionally uses any portion of the proceeds of the issue of
which such bond is a part for one of the purposes described in (i)
or (ii) above.
"Authority" means the Bakersfield Public Financing
Authority.
"Bond Counsel" means the law firm of Burke, Williams &
Sorensen, Fresno, California.
"Bond Date" means the dated date of the Series I Bonds,
which shall be determined by the city and the Authority and
established by the purchase contract for the Series I Bonds
identified in Section 26 hereof.
"Bond Denomination" means the amount of $5,000, which is
the minimum amount in which the Series I Bonds may be issued,
except that one Series I Bond, due on September 2, 1994, will
include the amount, if any, by which the principal amount of the
Series I Bonds exceeds the largest integral multiple of $5,000
contained in such issue.
"Bond Year" means the twelve-month period beginning on
September 2 of each year and ending September 1 of the following
year, except that the first Bond Year shall begin on the Closing
Date and end September 1, 1994.
"Bonds" means, collectively, the Series I Bonds and the
Series II Bonds.
"Certificate re ArbitraGe and HedGe Bonds" means the
certificate with respect to the Series I Bonds executed by an
1/11/94(136Z.4) 2
ORIGI~AL
officer of the City as of the Closing Date concerning compliance
with Sections 148 and 149 of the Code, as such certificate may be
amended or supplemented in accordance with its terms.
"city" means the City of Bakersfield, California, the
issuer of the Series I Bonds.
"Clerk" means the City Clerk or the Deputy City Clerk to
the City.
"Closinq Date" means the date upon which there is an
exchange of the Series I Bonds for the proceeds representing the
purchase price of the Series I Bonds by the Original Purchaser.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Costs of Issuance" means all applicable costs and
expenses incident to the calling, retiring or paying of the Tax-
Exempt Prior Bonds and to the issuance of the Series I Bonds,
including, but not limited to:
(i) underwriters' fees, if any (other than those
taken in the form of a discount on the Closing Date);
(ii)
underwriters'
fees, as well
counsel fees, if any, including Bond Counsel,
counsel, city's counsel and special tax counsel
as any other specialized counsel fees;
(iii) financial consultant fees, if any;
(iv) rating agency fees, if any;
(v) charges of the escrow agent or trustee, if any;
(vi) paying agent and certifying and authenticating
agent fees, if any;
(vii) certified public accountant fees, if any;
(viii) printing and advertising costs, if any, of the
series I Bonds and of any preliminary and final official
statements;
(ix) accrued and unpaid interest, if any, on the
Tax-exempt Prior Bonds;
(x) any premium necessary in the calling and
retiring of the Tax-exempt Prior Bonds;
(xi) City administrative expenses;
1/11/94(1562.4)
(xii) costs of engineering and feasibility studies
necessary to the issuance of the Series I Bonds; and
(xiii) amounts, if any, the City has paid or
transferred, either from a special reserve fund or from
surplus funds, into the redemption fund for the Tax-exempt
Prior Bonds, and any penalties and interest thereon, provided
such amounts, penalties and interest have been included in and
limited to the particular reassessments levied on those
subdivisions of land in the District securing original
assessment installments which are delinquent and for which the
payments or transfers have been made.
"Costs of Issuance Fund" means the special fund
established by the Treasurer pursuant to Section 10 of this
Resolution for payment of Costs of Issuance of the Series I Bonds.
"County" means the County of Kern, California, the county
in which the City is located.
"Debt Service" means the scheduled amount of interest and
principal payable on the Series I Bonds or the Series II Bonds, as
the text indicates, during the period of computation, excluding
amounts scheduled during such period which relate to principal
which has been retired before the beginning of such period.
"District" means the City of Bakersfield Assessment
District No. 86-2.
"Escrow Fund" means the separate fund into which a
portion of the Sale Proceeds of the Series I Bonds will be
deposited pursuant to Section 9 of this Resolution and the Escrow
Agreement dated as of the closing Date, between the City and Bank
of America, National Trust and Savings Association, as escrow
agent.
"Federal Securities" means those securities described in
Sections 1360 and 1360.1 of the California Financial Code and
includes United States Treasury notes, bonds, bills or certificates
of indebtedness, or obligations for which the faith and credit of
the United States are pledged for the payment of principal and
interest, including the guaranteed portions of small business
administration loans so long as the loans are obligations for which
the faith and credit of the United States are pledged for the
payment of principal and interest.
"Gross Proceeds" means the Proceeds and the Replacement
Proceeds, if any, of the Series I Bonds.
"Hiqher Yieldinq Investments" means any Investment
Property which produces a yield over the term of the Series I Bonds
which is materially higher than the yield on the Series I Bonds.
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"Interest Pavment Date" means each date upon which
interest on the Series I Bonds is payable, commencing on
September 2, 1994, and semiannually thereafter on March 2 and
September 2 of each year to maturity.
"Investment Proceeds" means any amount actually or
constructively received from investing the Proceeds of the Series I
Bonds.
"Investment Property" means any security (within the
meaning of Sections 165(g) (2) (A) or (B) of the Code), any
obligation (other than a tax-exempt bond unless such bond is a
"specified private activity bond" within the meaning of
Section 57(a)(5)(C) of the Code), any annuity contract or any
investment-type property.
"Net Sale Proceeds" means the Sale Proceeds of the
Series I Bonds less the portion of such Sale Proceeds invested in
a reasonably required reserve or replacement fund, if any, and as
part of a minor portion (i.e., the lesser of five percent of the
Sale Proceeds or $100,000).
"1984 Refunding Act" means the Refunding Act of 1984 for
1915 Improvement Act Bonds, Division 11.5 of the california Streets
and Highways Code.
"1915 Act" means the Improvement Bond Act of 1915, Divi-
sion 10 of the California Streets and Highways Code.
"Nonpurpose Investment" means any Investment Property in
which Gross Proceeds of the Series I Bonds are invested that is not
a Purpose Investment.
"OriGinal Purchaser" means the purchaser of the Series I
Bonds from the City on the Closing Date, which is to be the
Authority.
"Private Business Use" means use directly or indirectly
in a trade or business carried on by a natural person or in any
activity carried on by a person other than a natural person,
excluding, however, use by a governmental unit and use as a member
of the general public.
"Proceeds" means the Sale Proceeds, Investment Proceeds
and Transferred Proceeds of the Series I Bonds, excluding any
amounts actually or constructively received with respect to a
Purpose Investment that are properly allocable to immaterially
higher yield under Section 1.148-2(d) of the Regulations or to
qualified administrative costs recoverable under Section 1.148-5(e)
of the Regulations.
1/11/94(1362.4) 5
ORIGINAL
"Purpose Investment" means an investment that is acquired
to carry out a governmental purpose of the Bonds.
"Rebate Certificate" means the certificate executed by an
officer of the City as of the Closing Date concerning compliance
with the requirements for rebate to the United States pursuant to
Section 148 of the Code, as such certificate may be amended or
supplemented in accordance with its terms.
"Rebate Requirement" means the amount of rebatable
arbitrage for the Series I Bonds computed pursuant to Section
1.148-3 of the Regulations and the Rebate Certificate.
"Redemption Fund" means the fund established by the
Treasurer for the Series I Bonds into which shall be placed any
accrued interest for the period from the Bond Date to the Closing
Date of the Series I Bonds and all sums received from the
collection of reassessments and allocable to the Series I Bonds and
of the interest and penalties thereon, all as provided in
Section 10 hereof.
"Redemption Premium" means the following percentages of
the principal amount of the Series I Bonds for the periods
indicated:
Redemption Date
(both dates inclusive)
Redemption
Premium
Closing Date through September 1, 2002
September 2, 2002, through September 1, 2003
September 2, 2003, through September 1, 2004
September 2, 2004, and thereat~er
3%
2%
1%
0%
The Redemption Premium will be paid on Series I Bonds redeemed
prior to maturity as stated in Section 12 hereof. The Original
Purchaser and any subsequent owner of the Series I Bonds may waive
any Redemption Premium owing on the Series I Bonds. The Series I
Bonds shall not be redeemed in whole until on or after September 2,
2001.
"Requlations" means, to the extent applicable to the
Series I Bonds, Sections 1.148-0 through 1.148-11, 1.149(b)-1,
1.149(d)-1, 1.149(g)-1 and 1.150-1 of the regulations issued or
amended by the United States Treasury Department on June 14, 1993,
and any other regulations issued by the United States Treasury
Department to implement the provisions of Sections 148, 149 or 150
of the Code, as such regulations may be amended from time to time.
"Replacement Proceeds" means amounts as defined and
determined under Section 1.148-1(c) of the Regulations.
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"Resolution" means this Resolution No. ~-9~ , as it may
be amended by the Council from time to time.
"Sale Proceeds" means any amounts actually or
constructively received from the sale of the Series I Bonds,
including amounts used to pay underwriters' discount, if any, or
compensation and accrued interest on the Series I Bonds (other than
pre-issuance accrued interest, if any).
"Series I Bond" or "Series I Bonds" means the City of
Bakersfield Assessment District No. 86-2 Limited Obligation
Refunding Bonds, Series I (Tax Exempt), in an aggregate principal
amount of $10,220,000, issued pursuant to the 1984 Refunding Act
and this Resolution. Each Series I Bond shall be substantially in
the form provided in Exhibit A, which is attached to and made part
of this Resolution. The Series I Bonds are expected to be tax-
exempt bonds.
"Series II Bonds" means the City of Bakersfield
Assessment District No. 86-2 Limited Obligation Refunding Bonds,
Series II (Taxable), a separate issue of bonds, in the aggregate
principal amount of $1,610,000, to be issued by the City pursuant
to the 1984 Refunding Act. The Series II Bonds are expected to be
taxable bonds. The Series II Bonds are secured by the same
reassessment lien as the Series I Bonds and have parity with the
Series I Bonds. Said lien is sufficient to pay Debt Service on
both series of Bonds. Pursuant to Section 17 hereof, the City has
covenanted that any foreclosure action against said lien shall be
simultaneous for the Series I Bonds and the Series II Bonds.
Pursuant to Section 12 hereof, payments or collections of
assessments shall be applied first to Debt Service of the Series II
Bonds and then to Debt Service of the Series I Bonds.
"Tax-exempt Prior Bonds" means, collectively, all of the
following bonds issued by the City:
Improvement Bonds, City of Bakersfield, Assessment
District No. 86-2, Series A;
Improvement Bonds, City of Bakersfield, Assessment
District No. 86-2, Series B; and,
Improvement Bonds, City of Bakersfield, Assessment
District No. 86-2, Series D.
Each of the series listed above are
in that the interest on each series
by the United States of America and
of the State of California.
"tax-exempt bonds" of the City
is exempt from income taxation
from personal income taxation
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"Treasurer" means the Finance Director of
such other person appointed by the Finance Director
the duties of the Treasurer required hereunder.
the City, or
to carry out
"Transferred Proceeds" means transferred proceeds as
defined and determined under Section 1.148-9 of the Regulations (or
the applicable corresponding provision of prior law).
"Yield" means yield computed under Section 1.148-4 of the
Regulations for the Series I Bonds and yield computed under Section
1.148-5 of the Regulations for an investment. Calculation of Yield
is set forth more specifically in the Rebate Certificate.
SECTION 2. List of Reassessments. The reassessments now
remaining unpaid are as shown on the list presented to the Council
concurrently with this Resolution and are in the aggregate amount
of $10,220,000. The Council hereby approves such list. For a
particular description of the lots or parcels of land bearing the
respective reassessment numbers set forth in the list, reference is
made to the reassessment and to the reassessment diagram(s)
recorded in the office of the Public Works Director of the City
after confirmation thereof by the Council.
SECTION 3. Issuance of Bonds. Series I Bonds, in the
aggregate principal amount of not to exceed $10,220,000, shall be
issued as provided in this Resolution upon the security of the
reassessments in accordance with, under and pursuant to the
provisions of the Resolution of Intention, this Resolution and the
1984 Refunding Act and the proceedings conducted thereunder. The
Series I Bonds shall be issued only in fully registered form in the
amount of the Bond Denomination or any integral multiple thereof
(except for one Series I Bond, due on September 2, 1994, which will
include the amount, if any, by which the principal amount of the
Series I Bonds exceeds the largest integral multiple of $5,000
contained in such issue). The Series I Bonds shall mature in the
amounts and on the dates and at the rates of interest set forth in
the purchase contract for the Series I Bonds, to be entered into by
the City and the Authority pursuant to Section 26 hereof. The
Series I Bonds shall be numbered consecutively from 1 upward, and
shall be payable in numerical order, consecutively, commencing with
the lowest number within the maturity. If the Authority acquires
the Series I Bonds, one Series I Bond in an amount not to exceed
$10,220,000 may be issued to represent all serial bonds; and/or, if
term bonds are issued, a separate certificate for each term bond
maturity may be issued.
SECTION 4. Form of Series I Bonds. The Series I Bonds
shall be substantially in the form set forth in Exhibit A.
SECTION 5. Pavment of Series I Bonds. The Series I
Bonds shall bear interest at the rate not to exceed twelve percent
per annum or such higher rate of interest as may be authorized by
1/11/94(1362.4) 8
law at the time of sale of the Bonds as provided in the purchase
contract for the sale of the Series I Bonds to the Original
Purchaser, payable on each Interest Payment Date.
Each Series I Bond shall bear interest from the Interest
Payment Date next preceding the date on which it is authenticated
and registered, unless authenticated and registered (i) prior to an
Interest Payment Date and after the close of business of the
fifteenth day of the month immediately preceding such Interest
Payment Date, in which event it shall bear interest from such
Interest Payment Date, or (ii) prior to the close of business on
the fifteenth day of the month preceding the first Interest Payment
Date, in which event it shall bear interest from the Bond Date;
provided, however, that if at the time of authentication interest
is in default, each Series I Bond shall bear interest from the date
to which interest has been paid. Each Series I Bond will continue
to bear interest after maturity at the rate stated therein,
provided it is presented at maturity and payment thereof is refused
on the sole ground that there is not sufficient money in the
Redemption Fund with which to pay same. If a Series I Bond is not
presented at maturity, interest thereon will run only until
maturity.
SECTION 6. Execution. The Series I Bonds shall be
executed on behalf of the City and under its official seal by the
Treasurer and by the Clerk, whose signatures shall be manually
placed on the Series I Bonds or reproduced by engraved, printed or
lithographed facsimile thereof, and the official seal may be placed
on the Series I Bonds in like manner. Such signing and sealing
shall constitute and be a sufficient and binding execution of each
and every Series I Bond. If the Series I Bonds are executed under
seal by facsimile, the Series I Bonds shall then be delivered to
the Treasurer or the Agent for authentication by the Treasurer or
Agent.
If any officer whose signature appears on the Series I
Bonds ceases to be such officer before the authentication and
delivery of the Series I Bonds to the purchaser thereof, such
signature shall be as valid as if such officer had remained in
office until the authentication and delivery of the Series I Bonds.
SECTION 7. Authentication. Only those Series I Bonds
which bear thereon the original manual signatures of the Treasurer
and the Clerk and the original imprint of the City seal, or the
facsimile of such signatures and seal and a certificate of
authentication substantially in the form below, manually executed
by the Treasurer or the Agent, shall be valid or obligatory for any
purpose or entitled to the benefits of this Resolution. For
series I Bonds bearing a certificate of authentication, such
certificate shall be conclusive evidence that the Series I Bonds so
authenticated have been duly executed, authenticated and delivered
hereunder and are entitled to the benefits of this Resolution. The
1/11/94(1362.4) 9
certificate of authentication on any Series I Bond requiring
authentication shall be deemed to be duly executed if signed by an
authorized officer or signatory of the Treasurer or the Agent, but
it shall not be necessary that the same officer or signatory sign
the certificate of authentication on all the Series I Bonds.
1/11/94(136:~.4) 10
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of tho Series I Bonds de, scribed in th~ Resolution Providing for Issuance of Refunding
Bonds and Awarding Sale of Refunding Bonds referred to herein.
[Name Of Authenticating Entity]
By:
Authorized Representative
SECTION 8. Preparation and Delivery of Series I Bonds.
The Treasurer is authorized and directed to cause the Series I
Bonds to be prepared in accordance with this Resolution and to
cause the Series I Bonds to be executed and/or authenticated and
delivered to the Original Purchaser, upon receipt of the purchase
price therefor and upon the performance of the conditions contained
in the accepted offer for the purchase of the Series I Bonds.
SECTION 9. Escrow Aqreement and Escrow Fund. A separate
Escrow Fund entitled, "City of Bakersfield Assessment District
No. 86-2 Limited Obligation Refunding Bonds, Series I (Tax Exempt),
Escrow Fund," shall be established for the Series I Bonds pursuant
to the Escrow Agreement dated as of the Closing Date, between the
City and Bank of America, National Trust and Savings Association,
as escrow agent (the "Escrow Agent"). The Escrow Agent shall
maintain and account for the Escrow Fund and all monies therein and
earnings thereon separately from all other funds and accounts of
the Escrow Agent. The Escrow Fund shall be funded with the Sale
Proceeds of the Series I Bonds and any other amounts legally
available to the City for the refunding of the Tax-exempt Prior
Bonds, and shall be applied to the refunding of the Tax-exempt
Prior Bonds. Upon receipt of payment for the Series I Bonds when
they have been sold by the City, the Treasurer shall deposit with
the Escrow Agent, for deposit in the Escrow Fund, respectively, an
amount of the appropriate Sale Proceeds which, when added to other
amounts deposited therein, is certified by a certified public
accountant licensed to practice in California to be sufficient,
together with any interest or other gain to be derived from
investment of monies in the Escrow Fund, to refund and redeem in
full the Tax-exempt Prior Bonds on the earliest date on which they
may be redeemed, including payment of principal of, interest
accrued to the date of redemption and redemption premiums thereon,
if any, all as provided in the Escrow Agreement. Monies in the
Escrow Fund shall be invested in Federal Securities, and interest
and earnings on shall be allocated to that Escrow Fund.
The Treasurer is authorized and directed to execute the
Escrow Agreement in such form as the Treasurer deems appropriate,
to execute such other documents and to take such other actions as
may be necessary or appropriate to accomplish the redemption and
1/11/94(1362.4) 11
refunding of the Tax-exempt Prior Bonds in accordance with the
Escrow Agreement and this Resolution.
SECTION 10. Costs of Issuance Fund. The Treasurer shall
establish a special fund designated as the "City of Bakersfield
Assessment District No. 86-2 Limited Obligation Refunding Bonds,
Series I (Tax Exempt), Costs of Issuance Fund." The Costs of
Issuance Fund shall be kept separate and apart from all other funds
and monies of the City. Upon receipt of payment for the Series I
Bonds when they have been sold by the City, the Treasurer shall
deposit in the Costs of Issuance Fund Sale Proceeds in the amount
of $163,884 and other funds, if any, from time to time deposited
with the Treasurer for such purpose and so identified in writing to
the Treasurer.
Monies in the Costs of Issuance Fund shall be disbursed
by the Treasurer to pay Costs of Issuance of the Series I Bonds.
The Treasurer shall disburse monies from the Costs of Issuance Fund
only upon receipt of a sequentially numbered requisition, signed by
an authorized representative of the person requesting payment,
setting forth the amounts to be disbursed for payment or
reimbursement of Costs of Issuance, the name and address of the
person or persons to whom the amounts are to be disbursed, and
certifying that the amounts to be disbursed are for Costs of
Issuance properly chargeable to the Costs of Issuance Fund,
together with copies of all receipts, invoices, billings or other
documents reasonably necessary or as the Treasurer may reasonably
require to verify the foregoing.
When all Costs of Issuance for the Series I Bonds have
been paid, but in no event later than 180 days from the Closing
Date, the Treasurer shall transfer any monies then remaining in the
Costs of Issuance Fund to the Redemption Fund for the Series I
Bonds to be applied as provided in Section 11. The Costs of
Issuance Fund shall then be closed and the City shall no longer be
obligated to make payments for Costs of Issuance.
SECTION 11. Redemption Fund. The Treasurer shall
establish a separate Redemption Fund for the Series I Bonds into
which shall be placed any accrued interest for the period from the
Bond Date to the date of delivery of the Series I Bonds, funded
interest, if any, in an amount not to exceed the maximum permitted
by law as of the Bond Date, and all sums received from the
collection of unpaid reassessments provided for in Section 12 and
allocated to the Series I Bonds, including interest and penalties
thereon. From the Redemption Fund, disbursements shall be made to
pay the principal or advance redemption price of the Series I
Bonds, as applicable, and the interest due thereon.
SECTION 12. Collection of Reassessments. The
reassessments shown on the list presented to the Council herewith,
together with the interest thereon, shall be payable in annual
1/11/94(1362.4) 12
installments corresponding in number to the number of serial and/or
term maturities of the Series I Bonds and Series II Bonds issued.
An annual proportion of each unpaid reassessment shall be payable
in each year preceding the date of maturity of each of the Bonds
issued, sufficient to pay the Bonds when due, and such proportion
of each unpaid reassessment coming due in any year, together with
the annual interest thereon, shall be payable in the same manner
and at the same time and in the same installments as the general
taxes on real property are payable, and become delinquent at the
same times and in the same proportionate amounts and bear the same
proportionate penalties and interest after delinquency as do the
general taxes on real property. All sums received from the
collection of the reassessments and of the interest and penalties
thereon shall be allocated first to the Series II Bonds and placed
in the redemption fund for the Series II Bonds in an amount
sufficient to pay the principal of and interest on the Series II
Bonds due on the next Interest Payment Date, and then to the
Redemption Fund for the Series I Bonds.
SECTION 13. Redemption Prior to Maturity. The Series I
Bonds will not be redeemed in whole and paid in whole in advance of
maturity until on or after September 2, 2001. However, each
Series I Bond, or any portion thereof in the amount of the Bond
Denomination or any integral multiple thereof, outstanding may be
redeemed in part and paid in part in advance of maturity upon any
Interest Payment Date in any year by giving at least sixty days
notice and by paying the principal amount thereof together with the
Redemption Premium plus interest to the date of advanced maturity,
unless sooner surrendered, in which event interest will be paid to
the date of payment of the principal amount, all in the manner and
as provided in the 1915 Act.
The Treasurer shall cause to be called for redemption and
retire the Series I Bonds upon prepayment of reassessments in
amounts sufficient therefor, or whenever sufficient surplus funds
are available therefor in the Redemption Fund. In selecting
Series I Bonds for retirement, the lowest numbered Series I Bonds
of the various annual maturities therein shall be chosen pro rata
in such a way that the ratio of outstanding Series I Bonds to
issued Series I Bonds shall be approximately the same in each
annual maturity, insofar as possible. Within each annual maturity,
Series I Bonds shall be selected for retirement by lot. The
provisions of Part 11.1 of the 1915 Act shall be applicable to the
advance payment of reassessments and to the calling of the Series
I Bonds.
SECTION 14. Exchanqe. Neqotiabilitv, Registration and
Transfer of Series I Bonds. Any Series I Bond, upon surrender
thereof at the office of the Agent, together with an assignment
duly executed by the registered owner thereof or his attorney or
other legal representative in such form as shall be satisfactory to
the Agent, may, at the option of such owner, be exchanged for an
1/11/94(1:~62.4) 13
aggregate principal amount of Series I Bonds, equal to the
principal amount of the Series I Bond so surrendered and of any
Bond Denomination or Bond Denominations. The City shall make
provision for the exchange of Series I Bonds at the office of the
Agent.
In all cases in which Series I Bonds shall be exchanged,
the City shall execute and the Treasurer or Agent shall
authenticate and deliver at the earliest practicable time Series I
Bonds in accordance with the provisions of this Resolution.
The Treasurer or the Agent shall keep books for the
registration and registration of transfers of the Series I Bonds as
provided in this Resolution, which books shall at all times be open
to inspection by the City. The transfer of any Series I Bond may
be registered only upon such books upon surrender thereof to the
Treasurer or Agent together with an assignment duly executed by the
owner or his attorney or legal representative in such form as shall
be satisfactory to the Treasurer or Agent. Upon any such
registration of transfer, the City shall execute and the Treasurer
or Agent shall authenticate and deliver in exchange for such
Series I Bond a new Series I Bond or Series I Bonds registered in
the name of the transferee, of any Bond Denomination or Bond
Denominations, and in an aggregate principal amount equal to the
principal amount of such Series I Bond(s) so surrendered.
All Series I Bonds surrendered in any such exchange or
registration of transfer shall forthwith be cancelled by the
Treasurer or Agent. The City may make a charge for every such
exchange or registration of transfer of Series I Bonds sufficient
to reimburse it for any tax or other governmental charge required
to be paid with respect to such exchange or registration of
transfer, but no other charge shall be made to any owner for the
privilege of exchanging or registering the transfer of Series I
Bonds under the provisions of this Resolution. The City shall not
be required to make such exchange or registration of transfer of
Series I Bonds during the fifteen days immediately preceding any
Interest Payment Date.
SECTION 15. Ownership of Series I Bonds. In addition to
or as part of the books described in Section 14, the Treasurer
shall keep a register in his office showing the series, number,
amount, rate of interest and registered owner of each Series I
Bond. The person in whose name any Series I Bond shall be
registered shall be deemed the absolute owner thereof for all
purposes, and payment of or on account of the principal, and the
Redemption Premium, if any, of any such Series I Bond, and the
interest on any such Series I Bond, shall be made only to or upon
the order of the registered owner thereof or such owner's legal
representative. All such payments shall be valid and effectual to
satisfy and discharge the liability upon such Series I Bond,
including the Redemption Premium, if any, and interest thereon to
1/11/94(1362.4) 14
the extent of the sum or sums so paid. The Treasurer shall cancel
and file each Series I Bond paid in full.
SECTION 16. Limited Obligation. The Series I Bonds
shall represent and be secured by the reassessments in the same
manner as the original unpaid assessments constituted security for
the Tax-exempt Prior Bonds. Pursuant to Section 8769 of the 1915
Act, the City has determined that the City will not obligate itself
to advance available funds from the City treasury to cure any
deficiency which may occur in the Redemption Fund. Such
determination shall not prevent the City from, in the City's sole
discretion, so advancing funds.
SECTION 17. Covenant to Foreclose. The City covenants
with and for the benefit of the owners of the Series I Bonds that
it will order and cause to be commenced within 150 days following
the date of delinquency, and thereafter diligently prosecute, an
action in the superior court to foreclose the lien of any
reassessment or any installment thereof not paid when due, pursuant
to and as provided in Sections 8830 through 8836 of the 1915 Act,
provided that the alternative method of tax apportionment (Sections
4701 through 4717 of the California Revenue and Taxation Code) is
no longer applied by the City to special assessments for which
bonds have been issued pursuant to the 1915 Act, for any reason
whatsoever. The City further covenants that for any foreclosure
proceedings initiated pursuant to the foregoing, the City shall
also simultaneously initiate foreclosure proceedings for the Series
II Bonds. Any foreclosure proceedings taken pursuant to this
section shall be performed simultaneously with the foreclosure
proceedings for the Series II Bonds.
SECTION 18. Investment of Funds. Monies in the
Redemption Fund shall, whenever practicable, be invested in legal
investments for the City under applicable law for the moneys held
pursuant to this Resolution at the time when any of such monies are
to be invested therein. Any income from or interest on such
investments shall accrue to and be deposited in the fund from which
the monies were invested, except as otherwise provided in
Section 21 hereof and the Rebate Certificate.
(a) Nonpurpose Investments. Except to the extent
that the limitations on Nonpurpose Investments are avoided by
qualifying the investments under a "temporary period"
investment exception under the Code, the Regulations and the
Certificate re Arbitrage and Hedge Bonds, the Treasurer shall
adhere to the following limitations and requirements for
Nonpurpose Investments to avoid treatment of the Series I
Bonds as Arbitrage Bonds and the loss of the exclusion of
interest thereon from federal income tax:
(i) At no time during any Bond Year may the
amount invested in Nonpurpose Investments with a Yield
1/11/94(1362.4)
15
materially higher than the Yield on the Series I Bonds
exceed one hundred fifty percent of the Debt Service on
the Series I Bonds for the Bond Year; and
(ii) the aggregate amount invested as provided
in clause (i) above shall be promptly and appropriately
reduced as the amount of outstanding Series I Bonds is
reduced.
(b) Temporary Period Investments. Gross Proceeds
of the Series I Bonds may be invested in Higher Yielding
Investments for a temporary period until such Gross Proceeds
are needed for the purpose for which the Series I Bonds were
issued and/or for temporary investment periods related to Debt
Service on the Series I Bonds. Until the Treasurer is
otherwise advised, (i) the temporary period for monies in the
Escrow Fund shall be ninety days after the Closing Date, and
(ii) the temporary period for all other Gross Proceeds of the
Series I Bonds, other than Replacement Proceeds (if any) not
held in the Redemption Fund and Transferred Proceeds, shall be
thirteen months after the date such Gross Proceeds are
received.
SECTION 19. Non-arbitraqe Covenant. In addition to and
without limitation on Section 18, the City covenants that it will
not, except as permitted by law, use any portion of the Gross
Proceeds of the Series I Bonds directly or indirectly (i) to
acquire Higher Yielding Investments, or (ii) to replace funds which
were used directly or indirectly to acquire Higher Yielding
Investments, and that it will (iii) rebate to the federal
government all arbitrage profits (if any), (iv) comply with
limitations on the amount of Gross Proceeds of the Series I Bonds
that may be invested in Nonpurpose Investments and (v) comply with
all of the other provisions of Section 148 of the Code and the
Regulations in order to avoid treatment of the Series I Bonds as
Arbitrage Bonds subject to federal income taxation by reason of
Sections 103(b) and 148 of the Code. The City further covenants
that it will make no other use of the Gross Proceeds of the
Series I Bonds which, if made at the time of the issuance of the
Series I Bonds, would cause the Series I Bonds to be Arbitrage
Bonds subject to federal income taxation by reason of Section 148
of the Code.
SECTION 20. Certificate re Arbitraqe and Hedge Bonds.
The Treasurer is authorized and directed to execute and deliver the
Certificate re Arbitrage and Hedge Bonds certifying, on the basis
of the facts, estimates and circumstances now in existence and in
existence on the issue date of the Series I Bonds, as determined by
the Treasurer, that it is not expected that the Gross Proceeds of
the Series I Bonds will be used in a manner that would cause such
obligations to be Arbitrage Bonds or "hedge bonds" within the
meaning of Sections 148 and 149 of the Code. Such certification
1/11/94(1362,4) 16
shall be delivered to the Original Purchaser of the Series I Bonds
at the time of delivery of and payment for the Series I Bonds.
SECTION 21. Rebate Fund and Rebate Reauirement.
Notwithstanding any unrestricted investment during a temporary
period, Section 148 of the Code and the Regulations require that
the Rebate Requirement be paid to the United States Treasury. The
Treasurer shall establish and maintain the Rebate Fund (as defined
in the Rebate Certificate) designated by the name of the Series I
Bonds and shall deposit in the Rebate Fund the Rebate Requirement
as determined and calculated pursuant to the Rebate Certificate,
the Code and the Regulations. Monies held in the Rebate Fund are
hereby pledged to secure payments of the Rebate Requirement to the
United States Treasury, and the City shall pay or cause to be paid
to the United States Treasury the Rebate Requirement at the times
and in the amounts set forth in the Rebate Certificate. Monies in
the Rebate Fund shall be invested in legal investments for the City
under applicable law for such monies, and all earnings with respect
to such investments will be deposited in the Rebate Fund.
SECTION 22. Private Activity and Private Loan
Prohibitions.
(a) Private Activity Prohibition. The City shall
assure that (i) not in excess of ten percent of the Sale
Proceeds of the Series I Bonds are used for a Private Business
Use if, in addition, the payment of more than ten percent of
the principal or ten percent of the interest due on the
Series I Bonds during the term thereof is, under the terms of
the Series I Bonds or any underlying arrangement, directly or
indirectly, secured by any interest in property used or to be
used for a Private Business Use or in payments in respect of
property used or to be used for a Private Business Use or is
to be derived from payments, whether or not to the City, in
respect of property or borrowed money used or to be used for
a Private Business Use; and (ii) that, in the event that both
(A) in excess of five percent of the Sale Proceeds of the
Series I Bonds are used for a Private Business Use, and (B) an
amount in excess of five percent of the principal or five
percent of the interest due on the Series I Bonds during the
term thereof is, directly or indirectly, secured by any
interest in property used or to be used for a Private Business
Use or in payments in respect of property used or to be used
for a Private Business Use or is to be derived from payments,
whether or not to the City, in respect of property or borrowed
money used or to be used for a Private Business Use, then the
excess over five percent of the Sale Proceeds of the Series I
Bonds used for a Private Business Use shall be used for a
Private Business Use related to the governmental use of the
Series I Bonds.
1/11/94(1362.4)
17
(b) Private Loan Prohibition. The City shall
assure that not in excess of five percent of the Sale Proceeds
of the Series I Bonds is used, directly or indirectly, to make
or finance loans (other than loans constituting Nonpurpose
Investments or loans enabling the borrower thereof to finance
any governmental tax or assessment of general application for
a specific essential governmental function) to persons other
than governmental units.
SECTION 23. No Federal Guarantee. The City shall take
no action nor permit nor suffer any action to be taken if the
result of the same would cause the Series I Bonds to be federally
guaranteed obligations within the meaning of Section 149(b) of the
Code.
SECTION 24. Amendment. Without the consent of the
owners of the Series I Bonds, the City may amend this Resolution to
add, modify or delete provisions if the same is necessary or
desirable, in the opinion of the Bond Counsel, to assure the exemp-
tion of interest on the Series I Bonds from federal income
taxation, provided that the security interest of the owners of the
Series I Bonds is not adversely affected thereby.
SECTION 25. Authority of Treasurer. All actions
required by this Resolution to be performed by the Treasurer may be
performed by the designee thereof or such other official of the
City or independent contractor, agent or trustee duly authorized by
the Treasurer to perform such action or actions.
SECTION 26. Sale of Series I Bonds. The Council hereby
approves the sale of the Series I Bonds by negotiation with the
Authority. The Treasurer is hereby authorized to negotiate or
cause to be negotiated a purchase contract with the Authority for
such sale subject to the following terms : (i) the Yield on the
Series I Bonds shall not exceed the yield on the Authority's
Revenue Bonds, Series 1993B, by more than 1.5 percent; (ii) the
annual interest rate on the Series I Bonds shall not exceed twelve
percent; (iii) the total discount (inclusive of original issue
discount and underwriting discount) on the Series I Bonds, if any,
shall not exceed three percent of the aggregate principal amount of
the Series I Bonds; and, (iv) the aggregate principal amount of the
Series I Bonds shall not exceed $10,220,000. The Mayor of the
City, the City Manager of the City and/or the Treasurer are hereby
authorized and directed to execute and deliver such purchase
contract in the name and on behalf of the City and to execute all
other necessary documents in forms approved by Bond Counsel and the
City Attorney of the City, and to do all other things necessary to
complete the sale and delivery of the Series I Bonds.
SECTION 27. LeGal Opinion. The City will furnish the
legal opinion of Burke, Williams & Sorensen, Bond Counsel,
1/11/94(1362,4) 18
approving the legality of the proceedings and the issuance of the
Bonds.
SECTION 28. Appointment of Aqent. The Treasurer is
authorized to appoint a qualified financial institution to serve as
Agent, and such appointment is at the sole determination of the
Treasurer. The City may act as its own Agent, and, until such time
as a financial institution is selected, if ever, the City shall
serve as Agent for the Series I Bonds.
SECTION 29. Certified CoDies. The Clerk shall furnish
a certified copy of this Resolution to the Treasurer, the Agent and
the Auditor-Controller of the County.
III
III
III
III
III
1111194(1362.4) 19
I HEREBY CERTIFY that the foregoing Resolution was passed
and adopted by the City Council of the City of Bakersfield at a
regular meeting thereof held on the 12th day of January 1994, by
the following vote:
AYES: COUNCiLMEMBERS McDERMOTT, EDWARDS, DeMOND, SMITH, BRUNNI, ROWLES, SALVAGGIO
NOES: COUNC LMEMBERS .. r'~)F't~
ABSTAIN: COUNCILMEMBERS ~
~T: OOUNOILMEMBEI:~
Clerk of the Council of the
City of Bakersfield
APPROVED this l~h day of January 1994
MAYOR of%t~e City of Bakersfield
APPROVED AS TO FORM:
BURKE, WILLIAMS & SORENSEN,
Bond Counsel
By: RlcharA H~
COUNTERSIGNED:
city of Baker~ield
1/11/94(1362.4)
20
ORIGINAL
EXHIBIT A
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF KERN
NO.
$
CITY OF BAKERSFIELD ASSESSMENT DISTRICT NO. 86-2
LIMITED OBLIGATION REFUNDING BOND, SERIES I (TAX EXEMPT)
PRINCIPAL AMOUNT
$
BOND DATE
REGISTERED OWNER:
MATURITY DATE
(September 2)
INTEREST
RATE
MATURITY
PRINCIPAL
Under and by virtue of the Refunding Act of 1984 for 1915 Act Improvement
Bonds, Division 11.5 of the California Streets and Highways Code (the "1984 Refunding Act"),
the City of Bakersfield, California (the "City"), will, out of the Redemption Fund on the
EXHIBIT A
1/6/94(1380.2) A - ]
maturity date specified above for the payment of the Series I Bonds issued upon the unpaid
reassessments made for the refunding and reassessment more fully described in proceedings
taken pursuant to Resolution of Intention No. 1114, adopted by the City Council of the City on
January 12, 1994, pay to the registered owner hereof, or registered assigns, on the maturity date
stated above, the principal sum shown hereon in lawful money of the United States and in like
manner pay interest at the rate per annum stated above, payable semiannually on March 2 and
September 2 in each year commencing September 2, 1994. This Series I Bond bears interest
from the interest payment date next preceding its date of authentication and registration unless
it is authenticated and registered (i) prior to an interest payment date and after the close of
business on the fifteenth day of the month immediately preceding such interest payment date,
in which event it shall bear interest from such interest payment date, or (ii) prior to the close
of business on the fifteenth day of the month immediately preceding September 2, 1994, in
which event it shall bear interest from its date, until payment of such principal sum shall have
been discharged. Both the principal hereof and redemption premium hereon are payable upon
presentation and surrender hereof at the Office of the Finance Director of the City, or its
successors, as Transfer Agent, Registrar and Paying Agent (the "Agent"), and the interest hereon
is payable by check or draft mailed to the owner hereof at such owner's address as it appears
on the registration books of the Agent, or at such address as may have been filed with the Agent
for that purpose, as of the fifteenth day of the month immediately preceding each interest
payment date.
This Bond is the one and only bond representing the City of Bakersfield
Assessment District No. 86-2 Limited Obligation Refunding Bonds, issued by the City under the
1984 Refunding Act and that certain resolution titled "Resolution of the City Council of the City
of Bakersfield Providing for Issuance of Refunding Bonds and Awarding Sale of Refunding
Bonds in Connection With the City of Bakersfield Assessment District No. 86-2 (Series I ~ Tax
Exempt)," adopted by the City Council of the City on January 12, 1994 (the "Resolution of
Issuance"), in the aggregate principal amount of not to exceed $10,220.00 for the purpose of
providing means for paying for the refunding and reassessment described in said proceedings,
and is secured by the monies in said Redemption Fund and by the unpaid portion of said
reassessments made for the payment of said refunding and reassessment, and, including principal
and interest, is payable exclusively out of said Redemption Fund.
This Bond is transferable by the registered owner hereof, in person or by the
owner's attorney duly authorized in writing, at said office of the Agent, subject to the terms and
conditions provided in the Resolution of Issuance, including the payment of certain charges, if
any, upon surrender and cancellation of this Series I Bond. Upon such transfer, a new
registered Series I Bond or Series I Bonds, of any authorized denomination or denominations,
of the same maturity, and for the same aggregate principal amount, will be issued to the
transferee in exchange therefor.
Bonds shall be registered only in the name of an individual (including joint
owners), a corporation, a partnership or a trust.
EXHIB1T A
1/6/94(1380.2) A - 2
Neither the City nor the Agent shall be required to make such exchange or
registration of transfer of Series I Bonds between the fifteenth day of the month immediately
preceding any March 2 or September 2 and such March 2 or September 2.
The City and the Agent may treat the registered owner hereof as the absolute
owner for all purposes, and the City and the Agent shall not be affected by any notice to the
contrary.
The Series I Bonds will not be redeemed in whole and paid in whole in advance
of maturity until on or after September 2, 2001. However, this Series I Bond, or any portion
thereof in the amount of the five thousand dollars ($5,000) or any integral multiple thereof, may
be redeemed in part and paid in part in advance of maturity upon any March 2 or September 2
prior to its maturity date, by giving at least sixty days notice to the registered owner hereof and
by paying the principal amount thereof plus interest to the date of advanced maturity (unless
sooner surrendered, in which event interest will be paid to the dateof payment of the principal
amoun0 together with the following redemption premium computed upon the principal amount,
or portion thereof, of the Series I Bond to be redeemed:
Redemption Date
(both dates inclusive)
Redemption
Premium
Closing Date through September 1, 2002
September 2, 2002, through September 1, 2003
September 2, 2003, through September 1, 2004
September 2, 2004, and thereafter
3%
2%
1%
O%
The City will not obligate itself to advance available funds from the City treasury
to cure any deficiency which may occur in the Redemption Fund.
This Series I Bond will continue to bear interest after maturity at the rate above
stated, provided that it is presented at maturity and payment thereof is refused upon the sole
ground that there are not sufficient monies in said Redemption Fund with which to pay same.
If it is not presented at maturity, interest hereon will run only until maturity.
This Series I Bond shall not be entitled to any benefit under the Act or the
Resolution of Issuance, or become valid or obligatory for any purpose, until validly executed
and registered in accordance with the Act and the Resolution of Issuance.
///
III
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1/6/94(1380.2)
EXHIBIT A
A-3
IN WITNESS WHEREOF, the City of Bakersfield has caused the Series I Bond
to be executed and registered by its Finance Director and by its City Clerk and has caused its
official seal to be imprinted hereon all as of , 1994.
CITY OF BAKERSFIELD, CALIFORNIA
City Clerk
Finance Director
[S E A L]
ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
the within-mentioned Series I Bond and hereby irrevocably
constitute(s) and appoint(s)
attorney, to transfer the same on the books kept for registration hereof with full power of
substitution in the premises.
Dated:
EXItreIT A
1/6/9~,(1380.2) A - 4